Merging fly paths

With the Committee of Secretaries, appointed by the Group of Ministers, giving its nod to the setting up of a new company...

With the Committee of Secretaries, appointed by the Group of Ministers GoM, giving its nod to the setting up of a new company and merging the national carriers8212;Air Indian and India8212;with it, 2007 will herald in a single unified carrier under a new brand name and a new identity to take on the world.

The Committee of Secretaries is already learnt to have accorded approval to the basic concept of the merger, zeroing in on one of the five routes see box suggested by Accenture, the private consultant.

Under the arrangement, the new company will have six business unit8212;the airline; maintenance, repair and overhaul facility; cargo; ground handling; low cost carrier and hospitality 038; catering. Now, the two issues which are yet to be finalised are the location of the new entity8217;s headquarters and its brand name. The specifics of employee synergy and other human resource issues are also to be thrashed out.

With the global aviation trend leaning towards mergers and consolidation of airlines and formation of global alliances, the government feels this move will enable the national carriers to optimise fleet acquisition, leverage their asset base and strengthen their existing network and achieve economy of seats.

There is view in the government that with the challenges raised by the unprecedented boom in the civil aviation industry, increase in domestic and international passenger traffic and entry of new airlines, there is an urgent need for a consolidated airline entity which can effectively leverage on synergies arising out of complementary networks.

Meanwhile, with integration of the workforce being a major issue, the Civil Aviation ministry has been busy assuaging fears related to retrenchment. On more than one occasion, the government has reiterated its stand that the merger will not lead to any 8220;retrenchment of personnel8221; and that 8220;a fair and objective approach to handling people8217;s concerns will be adopted8221;. Further, the ministry has said the merger process will be tailored in a way that it protects the 8220;remuneration, perquisites and status of all the employees8221;.